April 8, 2021
To Whom it may concern,
I have been engaged as a finance professional in financial markets for 25 years, including a significant time as a market trader/analyst at the central Bank of Canada.
In my years of experience, I have witnessed many market crises, such as the SL collapse, the Asian Currency crisis, LCTM, Russian bond crisis, the dot com collapse, the sub prime meltdown, the flash crash of 2010, the repo crisis of Sept 2019 and the Robinhood near default in January 2021.
In all of these cases, the problem has been the excessive use of financial derivatives to achieve leverage that was not systemically safe and in cumulative could have brought parts of the global financial system down.
Even as this Filing has been under the comment discussion period, there was the collapse of Archego's family wealth fund, which so far has resulted in $10 billion of losses to the lending banks, and quite possibly much more as trades continue to be unwound, due to unsafe use of derivative leverage.
For the benefit of DTCC members, and for the overall benefit of the global monetary system, I urge the SEC approve this proposal and speed its implementation.
Derivative instruments have the capability to inflict great harm if used to unreasonable degree, and measures should be put in place to safeguard market participants from unexpected consequences of over leverage.
Thank you,
Peter Hann CFA